Społeczność Forex pytania
Pros & cons of trend trading
One of the most significant advantages of trading trends is the potential reward versus risk. Strong trends are known to last much longer than most participants believe. In the last two decades alone, there have been a slew of trends that far outstripped what was "reasonably justified" by the factors driving them and most market participants' expectations.
However, higher risk/reward ratios come at a cost. The lower winning percentages of trend trading strategies are offset by the positive skew in reward relative to risk. It doesn't matter as long as the math determines where the risk/reward relative to the win% provides an advantage. For example, if you only win 40% of the time but make 3x more on winners than losers, it doesn't matter if you're wrong 60% of the time. The math is correct. As if you were correct 60% of the time while making 1.5x your risk on trades. Again, the math is correct.

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